Herbalife Ltd. (HLF): Analysts Like It, Even If Ackman Doesn’t

Herbalife Ltd. (NYSE:HLF) released its latest earnings report after the closing bell on Tuesday, and the results beat expectations. However, shares of Herbalife have fallen 5 percent in trading on Wednesday, erasing yesterday’s gains. Today, we have the reports of analysts at four firms concerning Herbalife, and they all believe it’s a good time to buy the company’s stock.

Analysts at SunTrust Banks, Inc. (NYSE:STI) gave three items that gave them “comfort” in shares of Herbalife. First, they said the company issued an audited 10-K in connection with its latest earnings report, and that regulatory filing indicated an unqualified opinion. They believe the stock will “carry added weight” because of how much scrutiny the company has been under.

Hedge fund managers have been taking sides over the company’s stock. Bill Ackman started it all in December, and he’s made it no secret that he holds a huge short in the company. Carl Icahn and Dan Loeb, on the other hand, went long on the stock.

The second item SunTrust found as a positive for Herbalife Ltd. (NYSE:HLF) was the lack of any “collateral damage” in sales as a result of the battle involving the hedge fund titans. And third, they pointed out that the company raised its earnings per share guidance for 2013 from $4.40 to $4.55 per share to $4.45 to $4.65 per share. That increase is in spite of a more adverse tax rate.

Analysts at SunTrust Banks, Inc. (NYSE:STI) have maintained their Buy rating and $65 per share price target on shares of Herbalife. Analysts at D.A. Davidson & Co. have also rated the company’s stock as Buy, although their price target is a bit higher at $78 per share. CanaccordGenuity analysts have also set their rating on shares of Herbalife at Buy, but their price target is $76 per share.

Barclays analysts have given shares of Herbalife Ltd. (NYSE:HLF) an Overweight rating and $60 per share price target, noting most of the same details as SunTrust.

About the author

Michelle Jones was a television news producer for eight years. She produced the morning news programs for the NBC affiliates in Evansville, Indiana and Huntsville, Alabama and spent a short time at the CBS affiliate in Huntsville. She has experience as a writer and public relations expert for a wide variety of businesses.